Violations of Branch Independence in Judgments of the Value of Gambles

Abstract

Branch independence is weaker than Savage's “sure thing” principle. It requires that judgments of gambles with a common outcome produced by the same probability-event must not reverse order when that common outcome is changed. Subjects judged 168 gambles from viewpoints of both buyer (highest buying price) and seller (lowest selling price). Judgments violated branch independence in both viewpoints. Violations also changed systematically between viewpoints, consistent with the theory that viewpoint affects configural weighting but not the utility function. Violations of branch independence were opposite those predicted by the model of cumulative prospect theory. The middle of three equally likely outcomes received the most weight in the seller's viewpoint. In the buyer's, lower outcomes received greater weights. In both viewpoints, the ratio of weights of the middle outcome to the highest outcome exceeded the ratio of weights of the lowest outcome to the middle outcome.